Canon Drops Rebel XTi Price by $300

We are indebted to the Nikon D40 for this turn of events. A day after the D40 came out as the cheapest Nikon DSLR, Canon announced a price cut for its newly-launched EOS Rebel XTi (400D) bringing its price to $600 for the body alone, and $700 with the 18-55mm kit lens.
This is a big price cut for Canon, a $300 mark-down from its announced prices when the EOS 400D debuted just 3 months ago.
In turn, the much older but feature-rich Rebel XT (EOS 350D) can now be seen sporting a price tag of about $600, at par with the simplified Nikon D40.
So, how do you express your gratitude to Nikon? I’d buy the D80 if I can afford it; heck, I’ll go straight up and get the Nikon D200 if I really had the money.
But since my budget is limited, I’ll settle for the highly successful EOS 350D instead. Remember that this model set a new benchmark for entry-level DSLRs when it broke into the scene in February 2005. Almost two years later, it’s still as desirable as ever, thanks to the emergence of the Nikon D40 (sigh).

Did Nikon anticipate this response from Canon, like how they had anticipated the EOS 400D and trumped it with the D80? Or was the D40 a bad move for Nikon knowing now that Canon would go down by a hefty $300 price reduction? What will be Nikon’s response to that?
The next few weeks leading up to Christmas will be interesting indeed.
nikon, canon, price, d40, eos, 350d, 400d